Tech Giants Gear Up for Earnings Showdown; Investors Await if AI Strategies Turned Into Profits

By Thea Felicity

Apr 18, 2024 11:06 AM EDT

SINGAPORE-ECONOMY-RETAIL
A worker walks along the bridge linking to a new Apple store, located in the water in front of the Marina Bay Sands, in Singapore on August 24, 2020.
(Photo : ROSLAN RAHMAN/AFP via Getty Images)

As the tech earnings season approaches, major players like Apple, Microsoft, Nvidia, and others are gearing up for what analysts anticipate will be a particularly eventful period, according to Yahoo Finance.

Generative AI, the cutting-edge technology enabling machines to create content autonomously, is poised to dominate discussions as companies strive to turn their AI investments into tangible profits.

Alex Smith, head of Canalys' channels research department, forecasts an overall growth rate of about 8% for large-cap technology firms. Notably, Nvidia is expected to outstrip the market greatly, signaling continued momentum in the AI sector.

However, investor attention isn't solely fixed on AI. 

Apple faces notable challenges, including antitrust lawsuits and declining iPhone sales in crucial markets like China. Meta and Google, too, will be under scrutiny as they offer insights into the performance of the digital advertising market.

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What Will Be The Main Focus For Investors

Generative AI remains a focal point, and heavyweights like Nvidia and Microsoft have witnessed soaring stock prices amid the AI boom. 

Daniel Newman, CEO of The Futurum Group, presses the importance of companies translating AI advancements into meaningful contributions to their financial performance.

While Nvidia has experienced meteoric revenue growth, analysts caution that maintaining such explosive numbers may prove challenging over time. Still, the company's recent advancements, such as the debut of its Blackwell architecture, position it favorably in the market.

Hyperscalers like Microsoft, Amazon, and Google are also on the radar as their AI-driven offerings gradually make their way to the market. Questions linger about how AI drives revenue growth for platforms like Azure and Google Cloud.

As anticipation builds for the earnings releases, investors are on standby for Apple's future AI plans, particularly as the company addresses challenges in its core iPhone business. Recently, investors in the stock market have welcomed the tech giant's announcement of integrating AI into Mac products.

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